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Mombasa Moi International Airport: Kenya plan tax incentives for low-cost airlines to boost tourism arrivals | Coastweek

Mombasa Moi International Airport: Kenya plan tax incentives for low-cost airlines to boost tourism arrivals. PHOTO - K.A.A.

Kenya government plan tax incentives for
low-cost airlines to boost tourism arrivals

by Ronald Njoroge NAIROBI (Xinhua) -- Kenya government is planning to offer tax incentives for low-cost airlines to fly into the country to attract more international tourists, officials said.

Kenya has set a target to raise the number of international travelers from 2 million in 2018 to 3 million by the end of 2022, Najib Balala, cabinet secretary in the Ministry of Tourism and Wildlife, told journalists in Nairobi on Monday evening.

"We are planning to roll out tax incentives for low-cost airlines that will bring visitors into Kenya beginning the next financial year," Balala told an event celebrating his winning the World Travel and Tourism Council’s Global Champion Award at the 2019 Global Summit in Seville, Spain, for Kenya’s work on promoting the social impact in the tourism sector.

Government data indicates that international tourists spent over 157 billion shillings (1.57 billion U.S. dollars) in Kenya last year.

Balala said the incentives will not impact the role of Kenya Airways, the national flag carrier, in attracting more inbound tourists.

No country in the world has developed a vibrant tourist sector without leveraging on low-cost airlines to bring in tourists, he said.

Kenya is keen to embrace an open sky policy to ensure that more international airlines operate in the country, Balala said.

The availability of affordable flights into Kenya from major global cities in the United States, Europe and Asia will boost the number of tourists in Kenya, he said, noting that the number of international visitors coming into Kenya is very low compared to its unique beach and wildlife products.
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EARLIER REPORTS:

Kenya to encourage African firms to list at Nairobi bourse

NAIROBI (Xinhua) -- Kenya plans to woo African firms to list at the Nairobi Securities Exchange (NSE) in order to make the country a regional financial hub, officials said on Monday.

Geoffrey Odundo, chief executive officer of NSE told Xinhua in Nairobi that so far Ugandan and Rwandese firms have cross listed at the Nairobi bourse.

"We want to encourage more African blue chip firms to list their shares at the NSE so that they can enhance the liquidity of the Kenyan capital markets," Odundo said when the Institute of Certified Financial Analysts (ICIFA) entered into an agreement with the NSE.

Odundo said that Kenyan capital market provides an opportunity for African firms to raise affordable long term finance to expand their operations.

Odundo said that Kenya is focusing on increasing the number of firms list at the NSE.

"More firms trading means that investors have a large pool of equity instruments to choose from,"he said.

He said that Kenya has a large pool of both institutional and retail investors that are willing to invest in firms that will offer good returns.

The NSE has also developed an incubation program that aims to lure more local firms to consider listing at the NSE in order to deepen local markets.

Odundo revealed that Kenya has a series of tax incentives for firms that list at the NSE.

He said that more firms will help to deepen the securities exchange where more than 60 percent of the market capitalization is currently dominated by six companies.
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Nairobi bourse to establish derivatives exchange by end of 2019

NAIROBI (Xinhua) -- Kenya’s Nairobi Securities Exchange (NSE) plans to establish a derivatives exchange by the end of 2019, an official said on Monday.

NSE CEO Geoffrey Odundo told Xinhua in Nairobi that only one more link in the overall structure of the market is yet to be developed but the trading platform for the derivatives market has already been finalized.

"We are keen to have the derivatives market functional by the end of 2019 so that Kenya can expand the array of capital market products available in the country," Odundo said when the NSE entered into an agreement with the Institute of Certified Financial Analysts.

The derivatives exchange, a financial market for instruments such as futures and options, will help attract new investors into Kenya, Odundo said.

The exchange will initially focus on equity products and then cover other capital market products, he said.

The NSE has already conducted a successful pilot of derivatives trading, Odundo said.

Kenya is keen to tap into the large pool of global investors who prefer trading in derivatives products, he said.
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Analyst urges Kenya to expand tax base to remain above IMF revenue threshold

NAIROBI (Xinhua) -- Kenya should expand its tax base in order to remain above the International Monetary Fund (IMF) revenue threshold of at least 15 percent tax to gross domestic product (GDP) ratio, analysts said on Tuesday.

Judd Murigi, head of research at ICEA LION Asset Management, said Kenya’s revenue-to-GDP ratio fell to 17 percent in 2018, after remaining relatively constant at 18-19 percent between the fiscal years 2014 and 2018.

"The revenue collection rate can still be improved, as has been seen in other developing countries that have significantly enhanced their tax collection by ensuring the war on corruption is won, broadening the tax base via simplifying the tax system, lowering rates and reducing unnecessary exemptions," Murigi said during the release of the April 2019 Investor Pulse Report.

Murigi noted that the bulk of the Kenya’s labor force is in the informal sector and as a result don’t pay income tax.

The non-formal sector could be incentivized to pay taxes if they are subjected to lower taxation rates, he said.

Murigi called on the government to further leverage the use of technology to capture more workers under the tax bracket.

Kenya needs to reform its fiscal policies to ensure that development expenditure is prioritized as opposed to recurrent expenditure, he said.

Development expenditure ub 2018 will be at its lowest absolute level since 2013, Murigi noted.

             

 

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